In numbers: India’s December inflation hits 3-month high

Rising core costs and narrower food deflation signal an end to India’s recent disinflationary trend

Jan 12, 2026, 18:56 IST1 min

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India’s headline inflation hit a three-month high of 1.33 percent in December. While food stayed in deflation (-2.71 percent) for the seventh straight month, the sequential jump signals a turn in the disinflationary cycle. Aditi Nayar, Chief Economist, ICRA, explains, “the uptick was driven by narrower deflation in the food and beverages segment as well as hardening inflation in the miscellaneous items.”

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India’s core inflation surged to a 27-month high of 4.45 percent in December. Nayar says that while this was largely led by precious metals, “core CPI excluding gold and silver remained unchanged at 2.4 percent between these months.”

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National inflation shows significant regional variation, with southern states reporting higher figures. Notably, Kerala’s inflation reached 9.5 percent, sharply exceeding the national headline rate. Madan Sabnavis, Chief Economist at Bank of Baroda, says this was on account of higher consumption of gold in the state. He adds, “Interestingly, in Kerala and J & K, rural was higher than urban inflation, while it was the other way round for the other three states.”

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Several key commodity groups saw significant price increases compared to the previous year. Oils and fats (6.8 percent) and fruits (6.7 percent) recorded the sharpest jumps, while meat and fish (5.1 percent) also heated up. Sabnavis says the inflation print in these groups “will continue to exert upward pressure in the coming months.” Conversely, vegetables (-18.5 percent) and pulses (-15.1 percent) cooled significantly.

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December’s inflation mix shows sharp extremes, with precious metals—gold and silver prices—continuing to surge.